ITC reversal if any

In my view you have to pay tax  "higher" of the below:

1. Amount equal to the input tax credit taken on the said vehicle, reduced by "5% per quarter" from the beginning           

                                  (or)

2. the tax on the Transaction value as determined.

Thank you for the reply but it has to be followed for the vehicle purchased in pre gst era ??

Dear Vinit


As per Notification 8/2018 CT (r)

Vehicle of Vat Regime Sold in GST Regime :
GST is applicable on Profit Margin (Sale-Puchase )

Vehicle Purchased & Sold in GST Regime :
If ITC claim , then GST is on transaction Value
If ITC is not claim , then GST is on Profit Margin (Sale - Purchase)

GST Rate 12 % & 18% is applicable as per CC engine of vehicle mentioned in Notification.

More then 1500 CC , leanth exceeding 4000 MM, GST is 18%

Else ,.. 12%

Thank you for the reply Dear Pankaj Sir, the margin method is followed only if the credit is not taken in VAT regime...if credit is taken in VAT regime what the procedure to follow..

In my view and opinion,

GST is a statute which has been replaced by various state and central laws. To alive and avail the Input credits of such pre GST era statues, GST has been facilitate through Form TRAN 1. 

We have been completed 5 financial years in GST era, and the assets on which Inputs availed in pre GST era, are coming to 5% to 0% as per valuation provisions.

 

Dear Rajindra

There is specifically prescribe above said notification in regard to sale of vehicle.

Thus valuation for sale of vehicle need to followed the said notification.

(Or can you specify the valuation rule prescribe in GST Act)

 

Dear Vinit 

YES YOU ARE CORRECT,  If you have claimed the vat input , the GST will be applicable on Transaction Value . 

Seee As per Section 7 of CGST Act , it's sure that it is supply as supply of or disposal of asset for  consideration in course & furtherance of business is supply. 

As per the AAR maharastra in Re: CMS info systems Ltd upheld by AAAR in 2018 , that the disposal of cash carrying Van is Taxable. 

So it is noted that where consideration involved for transfer or disposal of asset is treated as supply whether input tax credit has been availed or Not. 

As per the FAQ by cbic : Disposal of old vehicle for consideration would attract GST regardless of whether ITC has been availed or Not. 

So from above even though the VAT input has been claimed , the GST will be charged on Transaction Value. Yes if no VAT input has been claimed then the GST is leviable on Profit value .

Rate GST will be 18% residual Entry no. 453 , notification 1/2017 CT (r) 

 

 

Dear Vinit 

YES YOU ARE CORRECT,  If you have claimed the vat input , the GST will be applicable on Transaction Value . 

Seee As per Section 7 of CGST Act , it's sure that it is supply as supply of or disposal of asset for  consideration in course & furtherance of business is supply. 

As per the AAR maharastra in Re: CMS info systems Ltd upheld by AAAR in 2018 , that the disposal of cash carrying Van is Taxable. 

So it is noted that where consideration involved for transfer or disposal of asset is treated as supply whether input tax credit has been availed or Not. 

As per the FAQ by cbic : Disposal of old vehicle for consideration would attract GST regardless of whether ITC has been availed or Not. 

So from above even though the VAT input has been claimed , the GST will be charged on Transaction Value. Yes if no VAT input has been claimed then the GST is leviable on Profit value .

Rate GST will be 18% residual Entry no. 453 , notification 1/2017 CT (r) 

 

 

 

Please refer Section 18(6) of CGST Act along with CGST Rule 40 (2) for valuation.